"We think there are changes that we can make in 2009 that will bring us back to break even, which is pretty big progress from where we're going to close 2008," hospital President and Chief Executive Officer Russell Meyers said. "As we finish (it) in the next month, we'll bring them back a budget that is effectively break even."

This is for the fiscal 2009 budget, which runs from Oct. 1 of this year through Sept. 30, 2009.

The idea of using tax dollars to pay for care for all uninsured and indigent people also was debated, with the board saying they would like to see how proposed changes work before changing the tax policy. The hospital currently uses tax funds to pay for indigent care. Meyers said about 25 percent of people here are uninsured.

"We've seen in our community a rapidly growing uncompensated care burden," Meyers said, "But it's not coming from people the district has traditionally covered, it's people with higher incomes than the district population. The district population, if anything, is shrinking probably because our economy is strong. Most people are employed, they're just aren't that many people under the federal poverty guidelines anymore."

Meyers said the debate over how to use tax funds will continue.

"Understandably, the district board is concerned that we probably haven't been as aggressive as we need to be in collecting from people who have the ability to pay," he said.

Administration plans to bring policy and procedure changes to the board that, "will cause us to be more aggressive and see how far that takes us in reducing our bad debt."

Short-term equipment financing of about ,8.5 million - used for imaging equipment for the new medical office building - will have to be paid off with reserve funds. Meyers said this would use 25 percent of available cash on hand from the regular budget. Officials said the hospital has more than ,100 million in reserves.

Paying down some of its debt will bring the hospital into compliance with its revenue bond agreements. Because the hospital is anticipating a loss this year, Meyers said, "We're in danger of violating some covenants in our bond issues. One of the ways to take care of that is to pay down other debt."

The revenue bonds were issued in the early 1990s. The bond covenants require a certain level of hospital profitability every year. "If we fall short of those, there are things we have to do to make up the difference and that debt formula includes how much debt service we'll have in future years. So by paying down some of the debt, we'll reduce the future debt service and bring ourselves back into line with the covenants," he said.

Asked if he anticipated a reduction in the 1,400 full- and part-time workforce, Meyers said he did not.

"We do know that our staffing has grown the last few years," he said. "What we're doing as we develop the budget is carefully scrutinize all the positions for which we're recruiting. We're going to be looking at every position that comes vacant to determine case by case, is this a position we can do without? Can we consolidate this job into something else?

"Mostly by attrition, we anticipate reducing our staff a little bit," but not a lot, Meyers said.

The larger issue, Meyers said, is reducing overtime and continuing to cut down on contract - or temporary - labor.

On the subject of hospital employee benefits, Meyers said the basic health plan covers the employee with no premium, but they have to pay the deductible and a co-insurance fee if they use services.

"Then we have other options where they can pay a little more and get a little richer plan," he said. "We anticipate that will continue to be the case next year, but the premiums they pay for the richer plans are probably going to go up. We're going to look at minor increases in co-insurance and deductibles, but nothing at all like what's happening in the rest of the industry."